Toyota is working to have 70% of new cars connected globally by 2020, with almost all of those in the U.S. and Japan. Automakers are already using the cloud to generate revenue through telematics insurance and car-sharing services.
Toyota also has talked about using data to alert dealers when cars need servicing, provide information about road and traffic conditions for smart city planning, and inform retailers where their customers are commuting from to allow more targeted marketing.
If you build it, you own it, big data ed.:
“We got some value out of that but to be honest we found it hard to keep on top of, just hard to build skills at the pace required to integrate new technologies,” Knott says.
“No matter how hard we ran there is always something new coming in that we wanted to get access to, but we couldn’t get there quite fast enough to have really finished deploying what we were deploying previously.
“So it was hard to manage, hard to keep on top of, and also hard to scale. We had reasonable success but we were having these challenges.””
Original source: HSBC chief architect: Why machine learning is accelerating cloud adoption
In 2011 Friedberg decided to sell exclusively to farmers, and WeatherBill changed its name to The Climate Corporation. “We needed to feel a little less Silicon Valley and less whimsical,” said Friedberg. For the next few years he would spend half his time on the road, explaining himself to people whose first step was toward mistrust. “Farmers don’t believe anything,” he said. “There’s always been some bullshit product for farmers. And the people selling it are usually from out of town.”
He’d sit down in some barn or wood shop, pull out his iPad, and open up a map of whatever Corn Belt state he happened to be in. He’d let the farmer click on his field. Up popped the odds of various unpleasant weather events—a freeze, a drought, a hailstorm—and his crops’ sensitivity to them. He’d show the farmer how much money he would have made in each of the previous thirty years if he had bought weather insurance. Then David Friedberg, Silicon Valley kid, would teach the farmer about his own fields. He’d show the farmer exactly how much moisture the field contained at any given moment—above a certain level, the field would be damaged if worked on. He’d show him the rainfall and temperature every day—which you might think the farmer would know, but then the farmer might be managing twenty or thirty different fields, spread over several counties. He’d show the farmer the precise stage of growth of his crop, the best moments to fertilize, the optimum eight-day window to plant his seeds, and the ideal harvest date.
From The Fifth Risk.
Original source: A useful big data story
Financial goop on Cloudera and HortonWorks merging:
The deal for the merger of the two companies is surprisingly simple. Shareholders in Hortonworks will get 1.305 shares in Cloudera and Cloudera will be the remaining company in fact, if not necessarily in name. This means that Cloudera shareholders will own 60 percent of the combined company and Hortonworks shareholders will own the remaining 40 percent. The combined companies had a fully diluted equity value of $5.2 billion before the merger was announced. At the time the deal was announced, the combined firms had more than $500 million in cash, no debt, and 2,500 customers who largely do not overlap. There are more than 120 customers who spend $1 million a year and another 800 customers who spend more than $100,000 a year for subscriptions and such.
Original source: Hadoop Needs To Be A Business, Not Just A Platform
There’s lots of opinions on Cloudera’s IPO today. Here’s some that I’ve collected in my notebook.
Not valued high enough?
The chipmaker paid up for the privilege, putting a ‘quadra unicorn’ valuation of $4.1bn on Cloudera. Altogether, Cloudera raised more than $1bn from private market investors, making the $225m raised from public market investors seem almost like lunch money.
And then there’s the small matter of valuation. In its debut, Cloudera is only worth about half of what Intel thought it was worth when it made its bet.
“Much has been made of the huge valuation of that Intel-led round, but that’s all misguided noise,” according to IPO Candy, a website founded by Kris Tuttle, the director of research at Soundview Technology Group. “Intel didn’t make the investment for a financial return so the valuation isn’t relevant.”
Back in 2014, Intel was still smarting from missing the shift to mobile computing and Big Data was a favorite as the next big thing. The Santa Clara chip giant’s bet was placed chasing a strategic return, not so much banking a direct return on investment.
You know, all of this is a little bit of ¯_(ツ)_/¯. As I recall, Facebook’s IPO was all wiggly-woggly. If Cloudera makes a lot of money, gets bought for a lot of money, etc., no one will care to remember, just like with Facebook. Success is the best deodorant.
Their business, finances
Also from 451, earlier this month, a profile of their business:
Cloudera is nearly one-third bigger than Hortonworks, recording $261m in sales in its most recent fiscal year compared with $184m for Hortonworks. Both are growing at roughly 50%.
Since 2008, the company has grown steadily. As of January 31, it reports more than 1,000 customers. However, Cloudera is currently emphasizing and banking its success on what it calls the Global 8,000, which are the largest enterprises worldwide. The company notes that its number of Global 8,000 customers increased from 255 as of January 31, 2015, to 381 as of January 31, 2016, and 495 as of January 31. For the year ended January 31, the Global 8,000 represented 73% of Cloudera’s total revenue, while a further 10% of total sales came from the public sector. The company reports 1,470 fulltime employees as of January 31, a slight increase from its headcount of 1,140 the prior year.
More from Katie Roof at TechCrunch:
Cloudera’s market cap is now about $2.3 billion, significantly less than the $4.1 billion valuation Intel gave in 2014. This increasingly common phenomenon is now nicknamed a “down round IPO.”
In an interview with TechCrunch, CEO Tom Riley insisted that this was not a problem for the company because of the “growth prospects ahead of us.” If it performs well in the stock market, it could ultimately achieve the $4 billion-plus value. Square, which went public in 2015 at half its private market valuation, has since seen its share prices more than double.
(Side-note: comparisons of companies, Square and Cloudera, that have nothing to do with each other except being “tech” – and Square is payment processing, not “pure tech,” at that! – drive me a bit crazy, as listeners know.)
And a quick revenue/spend write-up from her:
Cloudera’s revenue is growing, totaling $261 million for the fiscal year that ended in January. The company brought in $166 million at the same time last year.
Losses were $186.32 million, down from $203 million in the same period the year before.
And, according to Jonathan Vanian: “Cloudera spent $203 million on sales and marketing in its latest fiscal year, up 26% from the previous year.”
I don’t really follow this space well enough anymore to quickly figure out the TAM: I suspect Cloudera operates in several data and BI related ones.
Cloudera isn’t only Hadoop, but 451 put the Hadoop market at $1.3b in 2016, growing to $4.4b in 2020, with a CAGR of 38.3% between 2015 & 2020.
If you throw data warehousing, BI, analytics, and an injection of the mega-databases TAM together, you get a really big TAM, anyhow. Keep in mind though that one of the traps of (definitionally orthodox) disruptors in this space is lowering the TAM of their respective markets, a la Red Hat in operating systems. I don’t get the sense that Cloudera is on that game plan, but others in the market might be.
Buyers’ plans & needs
With respect to what people would do with Cloudera and others in this space (including Pivotal), here’s a good ranking of the information infrastructure priorities Gartner recently found in enterprises:
Also of public/private cloud interest from the summary of that survey: “Based on survey responses, plans for on-premises deployments for production uses of data will drop from today’s 45% to 14% in 2018.”
People in the tech industry care a great deal about IPO’s like this. We’re all curious what The Market’s read on valuation of enterprise IT business models is for our own benefit, and just a general sense of the health of the sector. There’s also usually people you know at the company, so “yay” for people you know.
One day isn’t long enough to tell anything, though, cf., in a completely different space, that Facebook debut weirdness. People got all excited about Cisco buying AppDynamics because that seemed to show some “healthy” signs that money valued this kind of software/SaaS.
At any rate, people still seem to love the Big Data and such. From Cloudera’s CEO, Tom Reilly: “We’re competing with IBM and Watson, so our customers seeing the strength of our finances allows us to do more.” Think of all the free marketing!
The ensuing years have been remarkable. Our company has grown with the market. The original technology has morphed almost beyond recognition, adding real-time, SQL, streaming, machine learning capabilities and more. That’s driven adoption among some of the very biggest enterprises on the planet. They’re running a huge variety of applications, solving a wide variety of critical business problems.
Our early bet has proven correct: Data is changing the world. In applications like fraud detection and prevention, securing networks against cyberattacks and optimizing fleet performance in logistics and trucking, we’re delivering value. We’re helping to address big social challenges, improving patient outcomes in healthcare and helping law enforcement find and shut down human trafficking networks.
Against that background, an IPO takes on a more appropriate scale. We started Cloudera because we believe that data makes things that are impossible today, possible tomorrow. There’s more data coming, and there are plenty of impossible things to work on. Our journey is only well begun.
I admittedly don’t know Cloudera’s business model too well, but my sense is that they align well with the “have something to sell” model that many open source companies in the enterprise space forget to put in place.
The mathematical modeling of society is made possible, according to Pentland, by the innate tractability of human beings. We may think of ourselves as rational actors, in conscious control of our choices, but in reality most of what we do is reflexive. Our behavior is determined by our subliminal reactions to the influence of other people, particularly those in the various peer groups we belong to. “The power of social physics,” he writes, “comes from the fact that almost all of our day-to-day actions are habitual, based mostly on what we have learned from observing the behavior of others.” Once you map and measure all of a person’s social influences, you can develop a statistical model that predicts that person’s behavior, just as you can model the path a billiard ball will take after it strikes other balls.
Estimate of the market-size for companies like Wealthfront: “whilst in the UK robo-advisers currently only cover less than £1 billion assets under management, the US robo-advisory market handled $19 billion AUM in 2014 (a growth of 65% from the previous eight months).”
Watch over the next 2 years as the Big 4 of BI (IBM, Oracle, SAP, and Microstragy) battle distuption from well funded upstarts. Folks like SAS snd Terradata will have to pick sides.
It’s expected to have a valuation of $1.4B. I love it when pure play software company IPO’s because you get a peak at their financials and how they’re run for a specific type of software.